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Where Taxpayers and Advisers Meet

IHT PET when buying a house before getting married

robertmlaws
Posts:100
Joined:Wed Aug 06, 2008 3:10 pm

Postby robertmlaws » Mon Jul 11, 2005 6:03 am

My fiancee and I plan to buy a house and get married but it is not clear which will happen first.

I will be providing most of the money for the house purchase but it will be in joint names.

Suppose we buy the house before we marry. Would my larger contribution to the purchase be classed as a 'potentially exempt transfer' for IHT purposes?

Would it be best to make the house 'tennants in common', with ownership in proportion to our contributions, and then to transfer it to 'joint tenants' once we are married?

Would there me stamp duty payable at the change of tenacy?

thank you,

Robert

maths
Posts:8507
Joined:Wed Aug 06, 2008 3:25 pm

Postby maths » Mon Jul 11, 2005 8:31 am

A purchase prior to marriage where the respective contributions are unequal should be as tenants in common. Each party would then own the % which they in fact contibuted.

Purchase as joint tenants (meaning equality of onwership irrespective of contribution %)would precipitate potential iht consequences.

Once married the tenancy in common could continue but the respective shares be adjusted so that you each own say 50/50.

Although joint tenancy is the most common form of ownership for real estate in marriage, the use of tenants in common is perhaps preferable and allows more flexibility in the future.

robertmlaws
Posts:100
Joined:Wed Aug 06, 2008 3:10 pm

Postby robertmlaws » Tue Jul 12, 2005 12:42 am

Thank you, that is very clear.

I have a supplemntary question: would stamp duty be payable on the change from unequal proportions of TiC to 50:50?

best regards,

Robert

maths
Posts:8507
Joined:Wed Aug 06, 2008 3:25 pm

Postby maths » Tue Jul 12, 2005 2:09 pm

Not a stamp duty expert but as the transfer would i assume be effected by way of gift no SDLT should arise.

robertmlaws
Posts:100
Joined:Wed Aug 06, 2008 3:10 pm

Postby robertmlaws » Wed Jul 20, 2005 12:47 am

Ah yes, thank you.
Robert


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